TNT Parent Company Slammed with Lawsuit Over NBA Rights Fallout and $11.2B in Losses

Warner Bros. Discovery is finding itself in the kind of mess you wouldn’t wish on your worst enemy — unless, of course, you’re one of their shareholders. A proposed class-action lawsuit filed Monday accuses the TNT parent company of glossing over the impact of losing NBA media rights while painting a rosier picture of its financial health than reality seems to support.

The shareholders are saying, “Hold on a minute. You told us everything was fine, and now you’re $11.2 billion in the hole?”

That’s billion with a capital “B.” And a big chunk of that — $9.1 billion — comes from what they’re calling an “impairment charge.”

Translation: the value of their TV networks is plummeting as viewers and advertisers ditch traditional cable for streaming services. Throw in another $2.1 billion in merger-related costs, and the numbers get uglier than a fourth-quarter blowout.

Now, let’s talk about the NBA. WBD has been a home for NBA games through TNT for decades. We’re talking Shaquille O’Neal, Charles Barkley, Kenny Smith, and Ernie Johnson — a crew so beloved they practically print money.

But in July, the NBA signed a new broadcast rights deal with Disney, NBC Universal, and Amazon Prime, leaving WBD out of the game altogether. That’s a tough pill to swallow for a company trying to convince investors it’s on solid footing.

WBD tried to fight back with a lawsuit over matching rights, but that settled last week. Sure, they’ll still have Inside the NBA in some form, but the games? Gone. And if you’re a shareholder, that’s not much comfort.

CEO David Zaslav was telling investors earlier this year that everything was under control, that WBD had a “clear pathway to growth.”

But now that pathway looks more like a pothole-filled road, and shareholders are saying they’ve had enough. The lawsuit claims the company misled them, failing to disclose just how much losing the NBA would hurt.

Basically, it’s a tough situation. TNT is still trying to keep its hand in the NBA pot with shows like Inside the NBA, but the glory days of live games are done. For the shareholders, though, this lawsuit isn’t about salvaging the basketball partnership. It’s about trust, or lack thereof.

We’ll see how it all plays out, but right now, WBD looks like a company with a lot of explaining to do and a long road ahead to regain credibility. Kind of like a team that just lost its superstar player and has to figure out where it goes from here.